KUALA LUMPUR: OCBC Bank has upgraded Malaysia’s gross domestic product (GDP) growth to 4.8% for 2017 from 4.2% earlier and on the back of growing global trade in the second half.
In a note, OCBC said although the year began with concerns about the rise of protectionist politics in the developed world to impede global trade, it has fortunately turned out to be unwarranted.
Instead of being dragged down by a massive global trade slowdown, Malaysia’s economy was boosted by the pleasant surprise of robust trade flows, with exports growing stronger in the first quarter (Q1) of the year, at an average 21.4% year-on-year per month.
“Moreoever, the economy has received a fillip from domestic consumption.
For example, private investments rose by 12.9% year-on-year in Q1 compared to 4.9% year-on-year in the previous quarter, it added.
On monetary policy, OCBC said Bank Negara Malaysia would most likely keep its policy rate unchanged at 3.0% for the rest of the year.
An improvement in the growth outlook removes the need to inject further stimulus, while a stabilising inflation trajectory, chips away market talk about having to increase rates to battle price pressures, it said. - BERNAMA
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